NZD/USD: Downward momentum is building – UOB Group
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Downward momentum is building; New Zealand Dollar (NZD) is likely to decline vs US Dollar (USD), but it is unclear whether it can break the major support at 0.5450. In the longer run, it is too early to expect the weakness to stabilise, but it remains to be seen if NZD can decline to the next support at 0.5450, UOB Group's FX analysts Quek Ser Leang and Peter Chia note.
NZD is likely to decline
24-HOUR VIEW: "We noted yesterday that 'downward momentum seems to have slowed slightly.' We added, 'This, combined with oversold conditions, suggests NZD is more likely to trade in a 0.5500/0.5600 range today instead of declining further.' NZD then traded in a higher range of 0.5521/0.5625, closing at 0.5535. NZD fell sharply in early Asian trade today, and downward momentum is building. Today, provided that NZD remain below 0.5570 (minor resistance is at 0.5540), it is likely to decline. However, it is unclear whether there is enough momentum for NZD to break the major support at 0.5450."
1-3 WEEKS VIEW: "Following two straight days of decline in NZD, we highlighted yesterday (08 Apr, spot at 0.5545) that 'Although it is too early to expect the weakness to stabilise, it remains to be seen how much more can NZD decline.' We added, 'The next support is at 0.5450.' There is no change in our view. Looking ahead, should NZD break below 0.5450, it could drop further to 0.5405. On the upside, the ‘strong resistance’ level has moved lower to 0.5650 from 0.5690."
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